2018 Full Year Results

RNS Number : 3360R

Hunting PLC

28 February 2019

 

For Immediate Release

28 February 2019

Hunting PLC

("Hunting" or "the Company" or "the Group")

Results for the year ended 31 December 2018

Hunting PLC (LSE:HTG), the international energy services group, today announces its results for the year ended 31 December 2018.

Financial Summary^*

·        Revenue $911.4m (2017 - $724.9m**)
·        Underlying EBITDA $142.3m (2017 - $56.0m**) ·        Reported EBITDA $141.3m (2017 - $53.6m**)
·        Underlying profit from operations of $104.7m (2017 - $14.3m**)
·        Reported profit from operations of $75.4m (2017 - $(24.8)m loss**)
·        Underlying diluted earnings per share 49.6 cents (2017 - 8.0 cents**)
·        Reported diluted earnings per share 52.3 cents (2017 - (16.0) cents loss per share**) ·        ROCE 9% (2017 - 1%)
·        Net cash of $61.3m (31 December 2017- $30.4m)
·        Final dividend of 5.0 cents per share declared (2017 - nil), proposed to be paid on 10 May 2019 to shareholders on the register on 23 April 2019, subject to approval at the Company's AGM

*Underlying results are based on reported results before amortisation of intangible assets recognised as part of a business combination and exceptional items. Reported results are based on the statutory results for continuing operations as reported under International Financial Reporting Standards as adopted by the EU.

**2017 financial information has been restated to reflect the adoption of IFRS 15 Revenue from Contracts with Customers.

Operational and Corporate Highlights

Record performance delivered by Hunting Titan, supported by strong US onshore completion activity.

-          Increase in volume of H-1 Perforating Systems sold, as customers continue to adopt more efficient and safer perforating technology.

-          Capacity expansion initiatives commenced at Milford and Pampa facilities to address demand.

-          Rationalisation of distribution centres across North America to increase alignment with customer activity and general market outlook.

US segment records increased volumes as US onshore market accelerated.

-          Good customer acceptance of TEC-LOCK™ semi-premium connection, for use in onshore drilling operations.

-          Modest increases in demand for MWD/LWD tools as key customers' replacement programmes recommenced.

-          Increased volumes reported at Subsea as domestic and international deep water projects recommenced.

-          Production of Hunting Titan products now occurring within Hunting Electronics, Hunting Specialty and US Manufacturing facilities, increasing utilisation and inter-segment sales.

Sales volume improvement recorded within other international operating segments.

-          Canada operations report increased OCTG volumes following new customer wins.

-          European well intervention business recorded increased demand for pressure control and well testing equipment.

-          Asia Pacific operations report modest increase in OCTG sales in domestic China.

-          Middle East activity improved in the year as well intervention and OCTG sales into Northern Iraq recommenced.

Capital investment mainly addressing production capacity constraints.

-          $30.1m spent in the year, including investment to support future demand for Hunting Titan products, targeted to reduce costs and increase efficiency.

Group rationalisation continued in the year.

-          Closure of one manufacturing facility in Kenya and three distribution centres in North America.

Board changes.

-          Carol Chesney appointed Director and Chair of the Audit Committee in April 2018.

-          Keith Lough appointed Director in April 2018 and Senior Independent Director in August 2018.

-          John Nicholas retired from the Board in April 2018 and John Hofmeister retired in August 2018, both completing nine years' service.

Commenting on the results Jim Johnson, Chief Executive, said:

"The Group's improved performance in 2018 and into early 2019, has been driven by US onshore-centric drilling activity and investment, while the results of Hunting's international businesses remain dependent on further market improvement. Given the ongoing commodity price and geopolitical volatility, the Board remains focused on the agility and flexibility of the business to respond to market conditions. Initiatives to further improve profitability and margins, and reduce losses, including in-sourcing of production, facility rationalisation and inter-segment manufacturing, will also continue in the year ahead.

"The Company has a number of new products and technologies scheduled to launch in 2019, which will continue to broaden our market reach. Further, with the commissioning of new, higher-efficiency manufacturing, the potential for margin improvement in our key product lines is anticipated, however, it is also conditional on activity levels improving. The Board continues to review bolt-on acquisition opportunities, which, if concluded, will increase our presence in the wellbore and enhance our current product portfolio. Any potential acquisitions would need to complement our portfolio of onshore technologies as well as subsea completions within the oil and gas industry.

"With a strong balance sheet, tightly managed cost base and a strong presence in our chosen upstream equipment and service markets, Hunting remains well positioned to capture opportunities in the current market, should the recovery across the industry continue."

Group Results Narrative

For access to narrative on the Group's results (incorporating the Chairman's and Chief Executive's Statements, Market Review, Group Review, Outlook and Segmental Review) for the year ended 31 December 2018 please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/3360R_1-2019-2-27.pdf

Financial Statements and Notes to the Accounts

For access to the Financial Statements and Notes to the Accounts for the year ended 31 December 2018 please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/3360R_2-2019-2-27.pdf

Listing Rules / Disclosure Guidance and Transparency Rules Information

For access to Hunting's Business Model and Strategy, Risk Management (including Principal Risks) and Key Performance Indicators information and the Statement of the Directors' Responsibilities for the year ended 31 December 2018 please click on the following link.

http://www.rns-pdf.londonstockexchange.com/rns/3360R_3-2019-2-27.pdf

Page number references refer to the full Annual Report when available.

The linked documents provide access to all major financial and operational disclosures contained in the Group's 2018 Annual Report and Accounts. The complete 2018 Annual Report and Accounts will be published on 13 March 2019 and can then be accessed at www.huntingplc.com.

The financial information set out in the above links does not constitute the Company's statutory accounts for the years ended 31 December 2018 or 31 December 2017, but is extracted from those accounts. Statutory accounts for 2017 have been delivered to the Registrar of Companies and those for 2018 will be delivered in due course. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matter by way of emphasis without qualifying their report and did not contain statements under S498(2) or (3) of the Companies Act 2006. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards, this announcement does not itself contain sufficient information to comply with IFRS.

Analyst Briefing and Webcast

Hunting PLC will host an analyst briefing on Thursday 28 February 2019 at 10.45a.m. at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN.

An audio webcast will be available on:

http://webcasting.buchanan.uk.com/broadcast/5c4b2c06a0c50933d27109ad

For further information please contact:

Hunting PLC Jim Johnson, Chief Executive Peter Rose, Finance Director Tarryn Riley, Investor Relations	Tel: [phone]
Buchanan Ben Romney Chris Judd	Tel: [phone]

Notes to Editors:

About Hunting PLC

Hunting PLC is an international energy services provider to the world's leading upstream oil and gas companies. Established in 1874, it is a premium listed public company traded on the London Stock Exchange. The Company maintains a corporate office in Houston and is headquartered in London. As well as the United Kingdom, the Company has operations in Canada, China, Indonesia, Mexico, Netherlands, Norway, Saudi Arabia, Singapore, United Arab Emirates and the United States of America.

The Group reports in US dollars across seven segments: Hunting Titan, US, Canada, Europe, Asia Pacific, Middle East/Africa/Other and Exploration and Production.

Hunting PLC's Legal Entity Identifier is 2138008S5FL78ITZRN66.

 

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